Looking For a Whole Life Policy

[Bluefin646]

Funny larry, i think you were the 1st one to make a rude comment. You are exactly the arsehole i take you for. Not sure why everyone feels a need to rehash it all. My first post, if re-read has nada negative. Just a few questions.
I was quickly heckled and insulted and made a few exaggerated comments to defend myself. Would do it again.
Its great to understand the quality of individuals in the industry. Makes decisions much easier.
Funny no one quotes all the 'ty, ty, ty Gents' to those that tookthe time to describe a few things to me, first and foremost BNTRS!
To the others take your crap responses and shove it where the sun dont shine.
For all those that gave me any help, again, a sincere Thank You.
Still waiting for my rating so havent decided on plan yet. Although some benefits to the whole life, rt now i am def leaning away from it as 1. Cost 2. Amt of years 3. Perceived level of safety is way TOO low. (risks are higher than most anticipate on the payouts). 4. Dont think easy to buy term and invest the difference, just dont think WL is the 'answer' for me. If i knew i had an extra 50k per year in discretionary income, i do think its a no brAiner way to park some cash w a death benefit and use for estate planning down the road. Just dont see it rt know, although a preferred rating just my change my mind.
Enjoy your day, even the jacks, lol.

 

[WinoBlues]

>> Just dont see it rt know, although a preferred rating just my change my mind.

And if you do not get that, who's fault will it be?

 

[Larry Tew]

Funny larry, i think you were the 1st one to make a rude comment. You are exactly the arsehole i take you for. Not sure why everyone feels a need to rehash it all. My first post, if re-read has nada negative. Just a few questions.
I was quickly heckled and insulted and made a few exaggerated comments to defend myself. Would do it again.
Its great to understand the quality of individuals in the industry. Makes decisions much easier.
Funny no one quotes all the 'ty, ty, ty Gents' to those that tookthe time to describe a few things to me, first and foremost BNTRS!
To the others take your crap responses and shove it where the sun dont shine.
For all those that gave me any help, again, a sincere Thank You.
Still waiting for my rating so havent decided on plan yet. Although some benefits to the whole life, rt now i am def leaning away from it as 1. Cost 2. Amt of years 3. Perceived level of safety is way TOO low. (risks are higher than most anticipate on the payouts). 4. Dont think easy to buy term and invest the difference, just dont think WL is the 'answer' for me. If i knew i had an extra 50k per year in discretionary income, i do think its a no brAiner way to park some cash w a death benefit and use for estate planning down the road. Just dont see it rt know, although a preferred rating just my change my mind.
Enjoy your day, even the jacks, lol.

I'm sorry, did you say something?

 

[scagnt83]

Go read my first post on page 4.

Bluefin, what is your occupation?
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It sounds like you are worried about an agent not maxing out the policy for you...

The best way to ensure your policy is near the MEC limit is to ask the agent to show you an illustration with the policy MEC'd.
If there is a big difference in the DB then its not overfunded.

You need to make sure on a WL that the PUAs are the elected Dividend option.

You need to elect a premium and a time frame that you are comfortable with.

As long as you pick a strong mutual company for WL you will not go wrong; I recommend Ohio National, Guardian, & Mass.


You need to find an agent who believes in overfunded WL and who knows how to max out a policy.


The reason an agent will max out a policy and take the lower comp is that we are in it for the long haul; we plan to have you as a client 20 years from now, so we plan to have to answer to you....

 

[Chuckles21]

I called the toll free number on their website (1-888-438-7254) during lunch and was connected with a live representative in SBLI Rhode Island office. He asked me some qualifying questions to estimate my underwriting class (family history, height, weight, etc) and then I asked about 10 pay policies with PUAs. After some back and forth, he said they don't offer a PUA rider (like Guardian) and the best he could do is make the dividends purchase PUAs. I thought this was going to be a useless call, but asked him for a 10 pay with 750K DB, and then I asked him what the CV was going to be in the first year. When he said a number that was more than my first year's payment, I then asked him to email me the illustration, along with a 15 pay illustration with the same DB, specimen policy, and dividend history. I had the illustrations in a few minutes, and the other info by the end of the day. The total call probably lasted 20 minutes.

I've attached the illustration if it is helpful.

Thanks to everyone for all the insight.[/quote]

Steve,

If you are still around this forum I would advise you to tread very cautiously with this company. Looking at SBLI of MA they have only even been around since 1991 and are a stock company at that. I personally would suggest going with a company with an actual long range track record and that is mutual. I personally am an agent with Northwestern Mutual and would be glad to at least show you what it is we can offer. You said it yourself in the beginning, our policies IRR history is impressive and although it doesn't guarantee anything in the future it does tell us something.

 

[Bluefin646]

Wino--- all your fault, I got preferred rating and blame U!

Scant --- two biggest concerns, among many. I am believer in the bucket theory, ie sprinkle $ in 401k, 529, pay extra mortgage payments each year 2.5 to be exact, so the idea of savings within WL is appealing. But I wud prefer to front load in 10 years but def risk of not being able to fund. Is there a rider that allows a L65 to be paid up ahead of schedule? And I mean "official paid up" not dividends etc can fund it.

I also read a stat, from James, that 4% of WL last til death, which means majority are surrendered or closed, my guess wud be at non oppty return to owner. Have u had luck with people remaining in policies and what is the set ups that are most enduring? Obviously predominate reason has to be discretionary cash flow. What are the others? What helps induce longevity?

Although Larry thinks I am a poser, contrary to his opinion, just a 39 head of family of 5 trying to make smart decisions. He does bring up Extremely! Valuable point that despite common "thought" that people don't need LI past 60 or 65, most get to that age and re-up at much higher prices! So Ty Larry cause I think that is very important point! And one I happen to agree with.

So DB - cv = risk to life co on payout. Bottom-line, if I was to build up cv and have untimely death, nada my family could do, correct? Larry, wino and others, Not Complaining, just asking fellas.

Is disability waiver worth it?

Avg cost of 1mln face, preferred rating, 39 male?
Better to buy 500k and overfund?

Gents, again thank you.
If any of you have any stock market questions, plse feel free to ask, although most of you already share my opinion that not all eggs should be in one basket!

 

[scagnt83]

so the idea of savings within WL is appealing. But I wud prefer to front load in 10 years but def risk of not being able to fund. Is there a rider that allows a L65 to be paid up ahead of schedule? And I mean "official paid up" not dividends etc can fund it.

Well, that is one reason a 10 pay policy is popular.

There is no way to "officially" pay up a L65; but one that is maxed funded should not be far off of the estimated pop date.

But all of this is why I like UL for CV growth.... I can design you a 10 pay policy, where you wont have to contribute anymore premiums, but you can if you want to.....

Also, UL is better designed for taking distributions.

Personally I like IUL, but it does mean a bit more risk, but your principle is never at risk.
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I also read a stat, from James, that 4% of WL last til death, which means majority are surrendered or closed, my guess wud be at non oppty return to owner. Have u had luck with people remaining in policies and what is the set ups that are most enduring? Obviously predominate reason has to be discretionary cash flow. What are the others? What helps induce longevity?

!

I dont know about the 4% stat; I have never heard that. That might be for one individual company, but I remember from my NYL days that I was told their WL had a 60% long term retention rate...

I do know that its well proven that only around 2% of term policies ever payout a DB.

You have to remember that the term WL is a pretty broad brush stroke.... there is WL that doesnt pay dividends and build up decent CV..... think final expense type policies... so yes, it does drop off some; but its situation specific.

I guarantee you that someone with a $100k+ CV is not cancelling their policy.

As far as my experience; overfunded policies stay on the books longer as long as the contribution amount is actually feasible for the client... I havent been in business for 20+ years, but I have only had two overfunded policies get dropped, both were because of extended unemployment... out of the older policies I have reviewed; the ones that were overfunded seem to be around more than the ones that werent from my experience.
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So DB - cv = risk to life co on payout. Bottom-line, if I was to build up cv and have untimely death, nada my family could do, correct? Larry, wino and others, Not Complaining, just asking fellas.

This is most peoples disconnect with PI.
To answer your question; no, that is incorrect.

You have two buckets of $.
The DB will always be more than the CV.
They are both "on the books" to be used; meaning that if you have a $1mill DB and a $500K CV, your family would get $1mill in DB if you were to die, not the 1mill-$500k

This is because you have not used the $500K yet
If you took the $500K out in a lump sum CV distribution, then yes, your family would be left with $500K (this is a very simple explanation, taking all of the CV at once will lapse the policy; just using it as an example)
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Is disability waiver worth it?

Usually, yes.

You will get a rating for the DI waiver. If you have a white collar job its most probably worth it.

Most disabilities increase your living expenses; so dont always assume that your DI will cover all of your LI premiums.

 

[scagnt83]

Here is an illustration for you.

I used IUL with a 6.5% rate.

Not knowing more about your specific needs; I just ran a 20 pay scenario with you taking distributions from 70-100...

You could take distributions whenever you wanted (you could take college $, and then wait and take retirement $..), I was just showing an example; and you could do a 10pay 20pay whatever you wanted...


What you need to really look at is the distribution phase.
Look at the DB in relation to the distributions.
Even though you end up taking $1.2mill from the policy (and you only put in $240k); the DB never goes below $500K (it starts at $320K)

The amount in the DB column is what your family gets, thats taking the CV into consideration (and the distributions during the income phase)


This is why PI is such a powerful income tool.
Its not just about the actual amount of CV, its about how efficient the policy is in paying out distributions; and PI beats any other financial product, especially when you consider the payout to the estate.

 

[scagnt83]

Avg cost of 1mln face, preferred rating, 39 male?
Better to buy 500k and overfund?

This we really cant answer.
Each company charges differently and rates your health differently.

Would it be better to get the overfunded $500K? If you are contributing the same premium then yes.

Remember that the CV grows the fastest when the premium is the most you can contribute for that DB.... or in otherwords, you want the smallest DB allowable in relation to the premium you want to contribute.
(I italicized allowable b/c this is an important point; the insurance company tells you how little you may contribute; the IRS limits you on how MUCH you can contribute.... why do you think that is??)


When planning for this I think about it this way:
Say you have a $1mill DB need.
And you want to deffer $12k/year into savings/retirement.

Using you as an example with the IUL I posted; we would first find out how little DB we can buy for the $12K/y in a PI policy.

Using our example we would have a $650K DB gap to fill.

Obviously the gap would be covered in term.

You now have your tax free savings and your entire DB need covered; as the PI grows, you can drop or reduce the term coverage as needed.


Hopefully this helps some.

 

[Bluefin646]

Helps a ton, Ty !
What is that iul?
The 3.5% is guArtanteed? And the 6.5% is estimate of mkt return?

Also, why doesnt disability waiver cover full premium if living exps go up? Confused on that statmemt.
Thx